The Surprising Truth About U.S. Oil Demand: Record Highs and Decreased Output
In a surprising turn of events, U.S. oil demand reached the highest seasonal level since 2019 in July, according to data from the U.S. Energy Information Administration. This increase in demand comes at a time when output has declined for the second time in three months, painting an interesting picture of the current state of the oil market.
Despite economic pressures affecting major consumers like China, U.S. oil demand has remained resilient this year. Total oil consumption rose by 1.2% from June to 20.48 million barrels per day in July, marking the highest level for that month since 2019. Both gasoline and ultra-low sulfur diesel demand reached their highest seasonal levels since 2019, with jet fuel demand hitting 1.83 million barrels per day, the highest for any month since August 2019.
On the other hand, oil output in the U.S. saw a slight decline for the second time in three months. Total production fell by 25,000 barrels per day from June to 13.205 million barrels per day in July. This decrease in output has been closely monitored by analysts and investors, especially as record supplies from the U.S. and weak economic activity in China have put pressure on oil prices throughout the year.
Notably, oil output in Texas dropped by 34,000 barrels per day in July to 5.71 million barrels per day, marking the first monthly decline in the top oil-producing region since January. Similarly, North Dakota, the third-largest oil-producing state in the country, saw a decrease in field production by 20,000 barrels per day to 1.16 million barrels per day, the lowest since January.
However, New Mexico, the second-largest oil producer, defied the trend with output increasing by 25,000 barrels per day to a record of 2.04 million barrels per day, as per EIA data.